The Relationship Between Related Party Transactions with Restatement of Financial Statements with regard to the Role of Board Independence

Subject Areas : Financial Markets and Institutions

Ghazaleh Saifi ¹ , Roya Darabi ^{2 *}

1 - PhD student, Department of Accounting, Faculty of Economics and Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran
2 - Associate Professor of Accounting Department, Islamic Azad University, South Tehran Branch, Tehran, Iran

Received: 2023-05-01 Accepted : 2025-06-21 Published : 2025-06-23

Keywords: Related Party Transactions, Restatement of Financial Statements, board independence,

Abstract :

Companies with transactions with related parties tend to choose accounting methods that have less transparency and quality than other similar companies; As a result of transactions with related parties, there is a tendency to increase the risks of significant distortion of financial reports, which can be effective in re-presenting financial statements. The purpose of this research is to investigate the relationship of related party transactions Restatement of Financial Statements with regard to the role of board independence. Research in terms of purpose is part of applied research and research method in terms of nature and content is cause and effect. The research was conducted in the framework of deductive-inductive reasoning and panel analysis was used to analyze the hypotheses. The statistical population of the research was all the companies admitted to the Tehran Stock Exchange and using the systematic elimination sampling method, 165 companies were selected as the research sample in the 10-year period between 2012 and 2021 was investigated. The results of the research hypotheses test showed that there is a positive and significant relationship between transactions with related parties and Restatement of Financial Statements; There is a negative and significant relationship between the independence of the board of directors and the Restatement of Financial Statements; Although the independence of the board of directors has a negative effect on the relationship between transactions with related parties and Restatement of Financial Statements; But this relationship is not significant..